PROPERTY-RIGHTS, EXTERNALITIES, AND RESOURCE DEGRADATION - LOCATING THE TRAGEDY

Resource degradation in the Third World is largely driven by the demands of farm households for fuelwood and land for agriculture. Since resources are often controlled through indigenous systems of property, the tragedy of the commons has been used to explain resource degradation. As a result, private property is suggested as a solution to resource degradation. A dynamic model capable of examining household incentives for resource use under private and common property is developed. Results of the model reject the conventional wisdom that gives rise to the presumed optimality of private (individual) property in natural resources, and the correlated indictment of group management regimes. © 1990.